Panay power company hails TRO stopping takeover by Razon-owned firm of its assets

ILOILO CITY — The Panay Electric Company (Peco) welcomed the issuance of a temporary restraining order (TRO) barring a new power distributing firm controlled by billionaire Enrique Razon to take over power distribution in Iloilo City.

In a statement, Peco said the 20-day TRO issued by the Mandaluyong Regional Trial Court against More Power Corp. (More Power) is a “first step towards finally giving due process to an otherwise process-less exercise.”

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“The courts can now meticulously examine multiple unconstitutional provisions in the More (franchise) and decide on what is a first in the entire history of utilities and which could set a precedent for future decisions,” said Marcelo Cacho, Peco administrative manager.

Cacho said they were hoping that an injunction would be further issued by the court while the constitutionality of the franchise is being resolved.

In the five-page TRO, the Mandaluyong RTC Branch 209 barred More Power, the Energy Regulatory Commission (ERC) and the Department of Energy (DOE) from enforcing Republic Act (RA) 11212.

The law, which took effect on March 6, granted a 25-year franchise to More Power and authorizes the firm to “establish, operate and maintain” an electric power distribution system for consumers in Iloilo City.

The TRO takes effect upon the payment of a P5-million bond by the Panay Electric Company (Peco).

Peco deposited the bond on Wednesday, according to Cacho.

More Power said it would abide by the TRO, which was issued less than a week after its franchise became effective.

“As we are always saying, we will respect the decision of the court,” More Power president Roel Castro said in a statement.

The company did not want to issue further statements saying the issue is already before the court.

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The order issued by Judge Monique Quisumbing-Ignacio barred the respondents from commencing expropriation proceedings and the takeover of Peco’s distribution assets.

It also prohibited the ERC and DOE from issuing a Certificate of Public Convenience and Necessity (CPCN), which is a requirement for a public utility to operate.

“Petitioner PECO was able to establish that the implementation or enforcement of Sections 10 and 17 of RA 11212 will materially and substantially invade its rights to equal protection under the law, due process, and against unlawful taking of property, since respondent MORE, by invoking Sections 10 and 17 of RA 11212, can easily take away, under the guise of eminent domain, petitioner PECO’s distribution assets,” according to the court order.

It said the TRO was necessary to prevent “the infliction of irreparable injury to PECO.”

The court also set a hearing on April 2 to determine whether the TRO will be converted into a writ of preliminary injunction.

The TRO is in relation to the petition for declaratory relief filed by Peco against More.

Peco, in its petition, asked the court to declare certain provisions of RA 11212 as invalid or unconstitutional including the provision allowing More Power to expropriate Peco’s assets.

“The grant of authority to expropriate all of petitioner Peco’s assets is arbitrary and unduly oppressive because it basically allows respondent More to arrogate unto itself what it could not otherwise lawfully acquire,” according to its petition.

More Power last Monday filed an expropriation complaint against Peco and sought the issuance of a writ of possession over Peco’s distribution assets.

It said it was willing to pay P481,842,450 for the expropriation of Peco’s distribution assets.

Aside from buildings, pieces of machinery and equipment, the expropriation complaint also covered office furniture and fixtures, computers, software, and service vehicles, among others.

Under RA 11212, More Power has to put up its own assets or acquire existing ones not later than two years after the franchise took effect.

Peco’s franchise expired on January 18 and is operating under a CPCN issued by the ERC valid until May this year. More Power has a pending application for a CPCN.

Owned by the Cacho family, Peco has been operating in the city since 1923 and has around 55,000 consumers, including residences and offices.

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